The rapid changes in the search industry over the last sixteen months have left many web publishers wondering whether they should pivot their business models or exist the industry entirely. This is a difficult question for business owners who have invested years of their lives and much of their wealth in firms which may no longer be viable contenders in the "new" search industry.
SWOT analysis is a technique which business owners can use to strategically analyze their businesses in relation to their competitors and the marketplace as a whole. SWOT stands for Strengths, Weaknesses, Opportunites, Threats.
Strengths are attributes of the organization which provide an advantage in the marketplace.
Weaknesses are attributres of the organization which cause a disadvantage in the marketplace.
Opportunities are actions the organization could take to create an advantage in the marketplace.
Threats are events which could happen in the environment and cause the organization to be disadvantaged.
The first two areas, Strengths and Weaknesses, focus primarily on the internal attributes of the organization. The last two areas, Opportunities and Threats, focus primary on how the organization may be affected by external events.
Specifics for Web Publishers
Many firms in the same industry will share similar Strengths and Weaknesses. Even more so, most firms in any industry will be responding to similar Opportunities and Threats.
Strengths and Weaknesses
Take a look at your organization. If you feel that your organization has an attribute which makes it stronger than it's competitors, add that to your Strengths list. If you feel that your organization has an attribute that makes it weaker than it's competiors, add that item to your Weaknesses list.
Access to Funding
Examples of Strengths might include:
We have ready access to venture capital
We own a widely recognized brand name
We own a PageRank 8 domain
I have Matt Cutts on speed dial
Our technical team members are experts in our platforms, development tools, and applications
Our marketing team members can make linkbait about lug nuts go viral
We invented this niche and our competitors have no hope of ever catching up
Examples of Weaknesses might include:
Our working capital is limited to what's in my wallet
Our top domain is a hyphenated .us domain
We're hoping to gain PageRank at the next update
Matt Cutts blocked me on Twitter
Our technical team is outsourced to Pakistan
Our marketing team is outsourced to Bangladesh
I read a book about this niche and it seems very exciting
Opportunities and Threats
The same event might be an Opportunity or a Threat, depending upon how your organization can respond to it. Search is a zero-sum game. For every winner, there must be a loser.
Take a look at your organization. If you feel that your organization has the ability to benefit from a coming change in the business environment, add that to your Opportunities list. If you believe that your organization is at risk from a coming change, add that to your Threats list.
Our niche (travel, local, etc...) is being taken over by Google (unless you are Google)
Our niche is being persecuted (gambling, medication) or promoted (green energy, section 8 housing) by the government
Our niche is being regulated by the government, which benefits large companies and hurts small ones
Our niche is being increasingly dominated by the top brands (unless you are one of the top brands)
Our niche is growing (iPads) or shrinking (Blackberries)
Profitability in this niche is rising (medical training) or falling (almost everything else)
Some marketing tactics may be filtered or penalized (directory submissions, blog commenting, profile building)
Significant competitors are entering (or leaving) the niche
Examples of Opportunities might include:
Legislation could force consumers or businesses to buy our goods and services
Government regulation could force small competitors out of the market, and we're a large competitor
Google is increasingly ranking the top brands for all searches, and we're a top brand
Our niche is growing
Profitability in the niche is rising
Our marketing tactics are being increasingly rewarded by the search engines
Our niche has significant barriers to entry which prevent competitors from entering the market
Examples of Threats might include:
Legislation could make our business illegal in our country
Government regulation could force small competitors out of the market, and we're one of those small competitors
Google is increasingly ranking the top brands for all searches, and we're not a top brand
Our niche is shrinking
Profitability in the niche is falling -- unless you can operate on thinner margins than your competitors and take their market share when they fail
Our marketing tactics are being increasingly filtered or penalized by the search engines
One of our competitors just did an interview with Forbes bragging about the high profit margins in this niche
Responding to the Results of Your Analysis
After listing your Strengths, Weaknesses, Opportunities, and Threats you should have a pretty good idea where your business stands. From here, it's time to take advantage of this new knowledge.
The web publishing industry is currently undergoing a major contraction. Some organizations will choose to continue in this business, while others will choose to pivot into related business or to exit the industry entirely. AdSense publishers may decide to move into affiliate marketing or selling white label products. Web publishers may decide to halt development on their own projects and offer their services as SEO's to large enterprises. Entrepreneurs may simply close their companies and accept positions with larger firms.
If your niche is travel, which Google is slowly taking over and Wikimedia is considering a push into, you might consider moving to a different niche, pivoting your web publishing business into an SEO firm, or moving into the nascent eBook market. If your niche is 3D printers, you might seek funding to stake out early market share in a niche that may be about to cross the chasm from the early adopter stage of development.
If you have deep knowledge, experience, and connections in your niche, you might try to stick with it and be the last man standing after your weaker competitors have failed. If your knowledge is less niche focused and more related to publishing and marketing, you might sell SEO services or take a job with one of the huge multinational brands which Google is currently favoring in the SERPs.
If you have access to large amount of venture capital, you might take advantage of that to become one of the large brands which Google prefers to rank. With enough funding, anything can be ranked well in Google. I would caution, however, against entering a niche which is likely to be on Google's roadmap. Google, in being able to control the order of search results, has an unbeatable advantage in promoting their own properties (YouTube, Google+, etc...).
As margins in the industry are falling in our race to the bottom, you may even find a significant competitive advantage in having a lower cost structure than your competitors. Lower costs create larger amounts of retained earnings which can be used to fuel development and growth.
The two most important aspects of SWOT analysis are to be honest with yourself and to take action based upon your analysis. As Virgil wrote, fortune favors the bold. Be bold in your honesty and your actions and fortune will smile upon you.